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Earlier this year the Red Hot Chili Peppers released a new kind of music video, one that allows fans to interact with the band and take part in the online experience.   The video incorporates a click-and-drag feature that allows viewers to explore different scenes in a panoramic manner. Click the “Show Hints” option to reveal even more interactive layers—check it out here:

This new type of digital interactive video is becoming increasingly popular, especially in the world of online advertising.  Gone are the days when a simple banner ad will suffice.  Marketers are looking for new ways to break through the clutter and engage consumers in more interesting and lasting ways.  People are always going to want a form of entertainment that scales with the technological advances around them… Interactive elements in web television are only a way to help supplement the actual content within the videos. They are a way to keep audiences focused and engaged.

While most digital ads today are lacking interactive elements, that could change within two years when potentially half may be interactive, says Peter Minnium, head of brand initiatives at the Interactive Advertising Bureau.

This shift in advertising allows for marketers to keep in pace with the transformations in technology and heavy use of social media. These new “dynamic display advertising” formats that allow on-the-fly customization as a user interacts with a site, as well as the ability to change ads via the social stream. In one case, as someone types in a ZIP code on Google Maps, a rectangular display ad next to the typing is customized to that region. Other ads, some of which exist today, allow companies to put live Twitter streams and comments into a banner.

So the question is, do you want to interact with your ads?  Is this new form of advertising truly engaging or just another intrusion into your life from pushy advertisers?  What would it take for you to interact with an ad online?